Question

In: Accounting

The Flapjack Corporation had 7,648 actual direct labor hours at an actual rate of $12.18 per...

The Flapjack Corporation had 7,648 actual direct labor hours at an actual rate of $12.18 per hour. Original production had been budgeted for 1,100 units, but only 956 units were actually produced. Labor standards were 7.3 hours per completed unit at a standard rate of $12.75 per hour.

Round your answer to the nearest cent.

The labor time variance is

$4,359.36 unfavorable

$4,359.36 favorable

$8,532.30 unfavorable

$8,532.30 favorable

Solutions

Expert Solution

LABOR TIME VARIANCE = (Standard labor hour- Actual labor hours)* Standard labor hour rate

Standard labor hour = Actual output * Standard time per output

                                         = 956 units * 7.30 hours

                                          = 6978.80 hours

Actual labor hours = 7648 hours

Standard labor hour rate = $ 12.75 per hour

LABOR TIME VARIANCE = (6978.80 hours - 7648 hours)* $ 12.75 per hour

                                                = $ 8,532.30 Unfavorable

Correct answer is Option C : $ 8,532.30 Unfavorable


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